Business
Bank deposits hits record high of Rs26.1 trillion: SBP
Banks' investment-to-deposit ratio (IDR) increased to 84.3 percent in August from 82.1 percent in August of last year.
![Bank deposits hits record high of Rs26.1 trillion: SBP](/media/79441/conversions/742385_20402048-1280x720.webp)
Islamabad: The deposits in commercial banks have soared to a record high of Rs26.1 trillion by the end of August 2023, driven by the prevailing highest interest rate in the country.
State Bank of Pakistan (SBP) statistics updates show that deposits in the banking sector increased by Rs. 3.95 trillion or 18% from Rs. 22.15 trillion in the same period last year. Bank deposits increased by 1.6 percent or Rs. 408 billion in August 2023 compared to Rs. 25.7 trillion in July 2023.
Bank lending jumped by 8% to Rs. 11.8 trillion in August, while investments rose by 21% to Rs. 22 trillion.
Banks' investment-to-deposit ratio (IDR) increased to 84.3 percent in August from 82.1 percent in August of last year.
The banks' advance-to-deposit ratio, however, dropped to 45.1% during the time under study.
Banks' preference for IDR is a result of the weak demand for private sector financing during difficult macroeconomic conditions brought on by the tight monetary policy of the central bank.
Notably, SBP is widely anticipated to increase the policy rate by at least 200 basis points, to 24 percent, following the regulator's most recent Treasury Bills (T-Bills) auction last week, in which the government raised Rs. 1.3 trillion in domestic debt at exorbitant rates of up to 25.06 percent.
The Monetary Policy Committee will meet tomorrow, September 14, 2023, to decide whether to increase interest rates or not.
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